Septmeber 19 - Office Work ( 6 hours)

This day, following the same path of the previous week, the task was to investigate how behavioral finance leverage investors in investing in sport companies. The result of this study shows the four main branches that characterize a general investment decision influenced by behavioral finance. These four main branches are heuristic behavior, role of personality, prospects and theory, feeling and emotions. The picture also shows some aspects that influence these branches. Sport is a particular environment where some of these aspects wight more than others because of the social context in which sports operate. This week the focus was on heuristic behavior. This type of investors’ behavior relies on mental short-cuts that accelerate the decision-making process, avoiding a cognitive overload (BehavioralEconomics.com, 2019). Sport can favor this process, leveraging on emotions, beliefs and psychological and behavioral needs such as the need to belong to something that represents your value and your passion. Despite this may work for potential new investors, this process doesn’t influence actual shareholders or board of directors in making decisions for a sport company or organization. In fact, the people that has to take actual decision for the company (common stockholders, CEO and all the members of the board) are more incline to make a longer decision-making process, to avoid making decisions that don’t reflect the values that are at the foundation of the investment itself. . Suppose that a common stockholder decided to invest in A.C. Milan (any reference is casual and not based on any actual investment) because it wants to feel part of a club that share his same values of innovation and inclusion, with an international fanbase that reflect the self-esteem need to feel part of a global organizations that operates in the economic sector that the investor love: soccer.